Juan Urthiague - Investor Relations Officer Martín Migoya - Chief Executive Officer Alejandro Scannapieco - Chief Financial Officer.

Tien-tsin Huang - J.P. Morgan Ashwin Shirvaikar - Citi Ryan Davis - Credit Suisse Matt Farrell - William Blair Avishai Kantor - Cowen and Company.

Good day. Welcome to the Globant Fourth Quarter and Full Year 2014 Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please also note that today’s event is being recorded.

At this time, I would like to turn the conference call over to Mr. Juan Urthiague, Investor Relations Officer. Sir, you may begin..

Thank you, Peter. And thank you all for joining us today on our call to review fourth quarter and full year 2014 results. By now you should have received a copy of the earnings release, if you have not, copies available on our website, investors.globant.com. Our speakers today are Martín Migoya, Globant’s CEO; and Alejandro Scannapieco, Globant’s CFO.

Before we begin, I would like to remind you that some of the comments on our call today maybe deemed forward-looking statements. This includes our business and financial outlook and the answers to some of your questions.

Such statements are subject to the risks and uncertainties are described in the company’s earnings release and other filings with the SEC. Please note that we follow IFRS accounting rules in our financial statements.

In our call today we will report non-IFRS or adjusted measures, this is how we track performance internally and in this is way to compare Globant to our peers in the industry. You will find a reconciliation of IFRS and non-IFRS measures at the end of the press release we published in our Investor Relations website announcing this quarter’s results.

I would like now to turn the call over to Martín Migoya, our CEO..

Thank you, Juan. Good afternoon, everyone, and thanks for joining us. I am happy to be here today to share with you some of the amazing highlights that happened during 2014 and the last few months of the year. For us 2014 has been very special.

With your help, the help of our customers and the professionalism of our Globant, we took very concrete steps on our path to become the best software product creation company in the world that we dream. One of those was to do our IPO in July, which had been an amazing experience and a new milestone in our history.

I want to especially thank those who have consistently trusted on our team to lead this process. Now we are ready to take the company and all our long-term partners to the next level. We want our teams to continue challenging the stethoscope of the industry.

During 2014 we created for our customers some of the most existing projects and products that are revolutionizing the world around us. We believe we are making history with our clients. In numbers, 2014 was a record year too, with record revenues of $199.6 million, 26.1% above 2013 and record gross margin, operating income and profits.

Our revenues ended above the top range that we provided during our last earnings call. We believe that our strong focus on new trends and technologies and solid execution of our studios and business units are the main reason that are driving our growth.

Let me make a brief recap on what’s going on within our company and how we believe the market is evolving. During the last months of 2014, we continue see reports from different sources that continue to highlight the importance of digital, customer experience, cloud, big data, social, Internet of Things and mobility to reshape various industries.

Being a pure-play on these emerging technologies positions us as one of the main player that can drive this transformation within large companies. As a proof of that our strong growth and revenues driven by our top accounts that are engaging with us in larger and longer term contract is primarily based on the topics mentioned above.

During 2014 we added a number of key customers that are interested in new trends and come from variety of industries, such as travel, healthcare, media, energy and financial services industries, which highlights how these trends are impacting different sectors and thus broadening our market opportunity.

The exposure of these trends is not about developing standalone small project around these technologies, the opportunity is totally different in scale. We are seeing companies that are looking to integrate this new approach with their core IT systems, which opens a far wider field for us to explore.

To better organize to take advantage of these opportunities we design new practices within our after-going live studio and enterprise customization studio that will help us bring innovation to more areas in the enterprise for longer periods of time.

On our Mobile Studio, one of the studios most demand, as those being expanded, to be able to provide scale into our large customers. It has grown 100% versus 2013 by specially leveraging the talent that we train within our mobile training school mainly on iOS and Android capabilities.

We are leaving in times in which technology has become friends with consumers. Today there are more than 3 billion active internet users, more than 2 billion active social accounts and more than 3.6 billion active unique mobile users.

With this reach it becomes more clear why companies are moving their budget attention into this emerging technologies to engage with their consumers better. This is reflected in an increasing demand for UX, visual design, user interface engineering and mobility.

Technology is unveiling, unmet needs and trends of consumers that our customers need to understand. For this reason we have started to publish our sentinel report to provide insights, trends and more. We invite you to download at sentinel.globant.com. In this report we describe an examples fast track and consumer trend to look out for in 2015.

We call the first one Better Life, which is the constant need for consumers to trust and visualize the evolution of life in every aspect. Now consumers will turn to innovative digital services that promise to put the right engagement and extra knowledge in their pocket 24x7.

New services and new products will empower us to become smarter, feeder and more aware of our progress. The second one is called use of cache which is about smart technology and relevant experiences everywhere.

In 2015, the literal physical ubiquity of technology is going to ramp up as new technologies reach and transform a wider array of everyday objects, breaking down old customs and bring in new and tech driven daily routines.

We’ll call the third one, [GeoLob] [ph] which is driven by the special connection with consumers feel to their locality, with friend and their neighborhood, city, country or in some other way. In 2015 consumers will look beyond feeding on front branded spaces.

Instead smart brand will stand out from the cloud by making deeper commitments and lasting meaningful impact on the chosen locality. In 2015 [GeoLob] [ph] becomes about purpose and near human. The fourth is called [Game Stammers] [ph] smart brands masters the art of surprise.

In 2015 many more brands will take the opportunity to break from the dollar periods of corporate brand and jump into a new era of surprising and engaging new ways of building relationship with consumers.

Finally, and as we already talking our last earnings call, we see that another important trend for 2015 will be what we called Effortless Payment, more power and less friction. This is one of the most important trends to follow in 2015 in the financial industry.

Many brands are adopting these cashless model and consumers are including this behavior as a daily habit. This technology is already in place to allow cashless payment and the brands are quickly moving in favor of this service. This will change the way we do transactions.

Based on these trends during 2014 particularly during the last months of the year, we have worked in some really interesting projects that highlight the importance of new technologies and how we’re positioned as a key player in this area by working for customers like National Geographic, Intuit, and Google ATAP with whom we are partnering on the development of their Project Ara’s marketplace, the first cellular phone that can be customized adding the Ara modules that you need for your specific use.

All these highlight point out the exceptional opportunity that we had in front of us. Our unique studio model leads the path on this growth and we have the required expertise at scale to revolutionize our customer strategy. This is not just about being on the forefront of technologies.

It is also about expanding our geographical footprint by reinforcing our presence within Latin America. As we see our customers increase their interest in the region due to their availability of high-quality talent pools, great times in alignment and closure cultural fit, we expanded ourselves to other locations.

In November, we open up a newly relevant center in Peru and we continued to grow in countries like Argentina, Brazil, Uruguay, Mexico, Columbia and the U.S. of course. Now turning to 2014 results. I’m proud to announce another year of robust financial performance. Our revenues increased to a record $199.6 million, 26.1% above 2013.

Adjusted gross and operating margins increased by 170 basis points and 770 basis points respectively. During 2014, we increased our revenue per head and enjoyed the benefits of the reorganizations carried out in Q4 2013. And we generated operating leverage as most of the investment in support area occurred prior to our IPO primarily during 2013.

Finally, our adjusted EPS for the period increased to $0.81, 59.3% above 2013. Alejandro will share more details on our financials later in the call. Our pipeline and backlog at the end of year ended up at record high levels including above maturity of long-term project with our current customers on high potential new customers.

For us, it keeps on being a big advantage to the absence of a dual mandate and our customers really appreciate our focus on the emerging technology, innovation and design.

During 2014, we rendered services to 296 customers to 0.5% above the 263 customers we had at the end of 2013, which implies high revenue per customer in 2014 versus 2013, showing our ability to further penetrate our customers.

10 of these customers were with revenues of more than $5 million compared with 5 last year, reinforcing our ability to grow our key accounts. Also we ended up 2014 with two accounts with revenues in excess of $10 million and four accounts with revenues over $10 million based on Q4 run rate.

I would also like to highlight our solid financial performance during our fourth quarter of 2014. Our fourth quarter revenue increased to a record of $55.1 million. Adjusted net income for the fourth quarter was $8.1 million, 14.8% adjusted net income margin and adjusted diluted EPS was $0.24.

Finally for 2015, we forecast another year of robust growth on margin expansions. Our long-term goal is to continue growing above the industry and expanding our margins. With that, I’ll turn the call over to Alejandro Scannapieco, our CFO, for a detailed financial review and provide guidance for the next quarter and full 2015.

Alej?.

Thank you, Martín. Good afternoon everyone. I’m really excited to be here sharing with you our fourth quarter and full year 2014 financial results. As Martín mentioned, 2014 was a strong and record year as we grew revenues to $199.6 million, 26.1% above 2013.

This strong growth was primarily driven by deeper penetration in our top accounts as it has been the case historically. Our largest customer grew 71.8% year-on-year and our top 10 accounts increased 39.5% compared to 2013.

This is a clear indicator of our ability to grow our largest customer by delivering digital mobile and our analytic process on other emerging technologies.

On top of that, a number of key additions to the portfolio, including among others two big financial institutions, a couple of large technology company, one energy producer, one airline and one healthcare company contributed to this robust growth in revenues.

Finally, 87.4% of 2014 revenues was generated from customers that were already working with us in 2015, a trend that repeats over time as we dedicate time and resources to form our existing customer base.

For 2014, our top one customer represented 8.7% of total revenue, top five customers represent 27.8% and top 10 customers represented 43.9% of revenues compared to 6.4%, 25.4% and 29.7% of revenues respectively for 2013.

We believe that our portfolio is well diversified for a company of our size with our key customers that would drive sustainable growth over the next five years. Compared to 2013, average revenue per top five customers increased 38% to $11.1 million on average revenue. Our top 10 customers increased 39.5% to $8.8 million.

We are very excited that our top customers are receiving the value that we provide and are increasing the size of their business and contract land with that. This reinforces our value proposition and give us a robust based to grow from 2015 and onwards. During 2014, 81.7% of our customers were in North America, U.S.

the top country, 12.4% in Latin America, Chile our top country and 5.9% were in Europe, U.K. top country. Our top three industry verticals for 2014 were technology and telecommunications with 23.5% of revenues, media and entertainment were 22.6% of revenues and professional services were 16.4% of revenues.

As you can see, we’re not concentrating in a particular industry and we remain pretty much balanced across different verticals. During 2014, 92.4% of our revenues were denominated in U.S. dollars depicting very limited exposure to FX with placements on our topline.

As written in our press release, our fourth quarter revenue increased to $55.1 million, which imply a 19.2% growth year-over-year despite having two less working days than in Q4 2013. Growth has been driven by strong traction of key customers and some great wins in technology and telecommunications, energy and healthcare vertical.

Moving down in our P&L, adjusted gross profit for the year was also record and increased to $81.7 million, 41% adjusted gross margin, a growth of 170 basis points year-over-year that was mainly driven by two factors, first increasing value added from our studios that translate into high revenue per head and second and more efficient organization after the internal restructuring of the business that we perform late in 2013.

Adjusted gross profit for the quarter was $21.9 million, 39.7% adjusted gross margin, an increase of 50 basis points year-over-year and a decrease of 130 basis points versus the third quarter of 2014.

Increase versus last year is primarily explained by revenue per head growth while the decrease versus Q3 2014 is explained by additional investments on our delivery structure to enhance firming capabilities, the lower number of working days combined with year end cost days and seasonal wage increases.

During Q4, we added 207 IT professionals, our largest quarterly headcount increase in 2014 and 24% above Q3 net additions, so a strong traction on the business side. Adjusted net income for the year was $25.9 million, 13% adjusted net income margin, an increase of $11.3 million or 380 basis points versus 2013.

Adjusted net profit for the year was a boost by a 550 basis point reduction in SG&A expenses. Make sure that’s part of the offset, combined with a strong gross margin. During 2014, we continued investing heavily in sales and marketing, closing the year with 36 sales employees, a 20% increase versus December 2013.

At the same time, the rest of the G&A areas gained efficiencies and start diluting as a percentage of revenue as most of the significant investment there was done prior to the IPO. Adjusted net income for the fourth quarter was $8.1 million, 14.8% adjusted net income margin, another robust result in the bottom line.

Adjusted diluted EPS for the year was $0.81 based on 31.9 million average diluted shares for the year, an increase of 59% compared to $0.51 from 2013. Adjusted diluted EPS for the quarter was $0.24 based on 34.3 million average diluted shares for the quarter, compared to negative $0.12 for Q4 2013.

As you may recall, Q4 2013 EPS was impacted by a $9.6 million negative allowance related to some fiscal credits that were being irrecoverable at that time. Now, let’s look at our balance sheet. As you know, we executed our IPO in July 2014 and that combined with our cash generation, contributed to reinforce our cash balance position.

Cash and investments as of December 31, 2014 increased to $62.2 million, compared to $26.7 million as of December 31, 2013. And borrowings decreased to $1.3 million after repaying $10.5 million of our working capital facility line, leaving Globant with almost no financial debt.

Total shares outstanding as of the end of 2014 were at 33.6 million common shares. We finished the year with 3,775 Globers, 3,424 of which were IT professional. Attrition in the last 12 months ending December 31 was 20.2%, pretty consistent with the last three years and 200 basis points lower than attrition as of December 31, 2013, which was 22.2%.

Before we move into the Q&A session of the call, I would like to share our outlook for Q1 2015 and for the full year ending December 31, 2015. We expect to continue delivering a strong revenue growth and profitability, as we start seeing the case in many years on our commitment when we made the IPO.

We also expect to continue making strategic investments into the business. Based on current visibility, we expect revenue for 2015 to be between $237 million and $245 million, implying 20.7% year-over-year increase at the midpoint of the range.

In terms of margins and as Martín mentioned before, our 2014 gross margin was one of our highest at 41% and 170 basis points over 2013.

For 2015, we expect gross margins to be slightly below 2014 levels, due to the additional investments in our operations on some FX headwinds, which we seek to offset at the net income slash EPS level by continuing SG&A dilution and the continuity of our current FX hedge strategy through the gain from foreign operations.

Diluted EPS for the year is expected to be in the range of $0.85 to $0.93, assuming 34.8 million average diluted shares outstanding for the full year. Before we move into our Q1 guidance, let me remind you that historically our year contains a seasonal pattern.

With Q1 being our softer quarter, given that it has the lowest number of working days, combined with the most important holiday season in Latin America. As such, both topline and margins tend to be lower in Q1. For the first quarter, we expect revenues to be between $51 million and $53 million, 20.6% year-on-year growth at the midpoint of the range.

Adjusted diluted EPS is expected to be in the range of $0.14 to $0.18, assuming 34.5 million average diluted shares outstanding for the quarter. With that let me hand over to Martín for closing remarks..

Thank you, Alex. So thanks everyone for participating on the call and for your continued coverage and support. So let’s please move now to the Q&A section of the call. Operator, can you please queue the questions? Thank you very much..

And our first question comes from Tien-tsin Huang from J.P. Morgan. Please go ahead with your question..

Great. Thanks. Good results, too. I want to ask first about just the top client business.

How that’s changed in terms of the composition of the clients? Any surprises there? I know you gave some of the details in terms of the revenue contribution but I’m curios the decline of composition changed in this fiscal year, your visibility has changed as well with the big clients..

Thanks, Tien-tsin for the questions. How are you? No, in essence, there is no change there. It’s pretty much the same customers starting to soften, maybe some others on the bottom line but no customers in the topline change..

All right. Terrific. And then just in general in terms of pipeline.

I think you guys hasn’t moved too much but I’m just curios in general if client behavior has changed at all in your line, as the year closed and as we started this new calendar year?.

Look, there is no -- as I said on the -- a few moments ago, the pipeline is extremely strong for us right now. And we have record openings -- the amount of backlog that we have. We have a record backlog. We are gaining some efficiencies. We are missing a little bit of the bench. We are hiring in a very healthy way.

So that’s the thing on the pipeline and the business. We don’t see any change. We see changes but as we were saying on the call, which is we are seeing everyday more budgets coming into this direction and emerging technology is being like very much the only conversation, not a subject in many of the meetings.

So that’s how we see and how we are supporting right now. We feel positive about it..

That makes sense. It’s great to hear. One more question then I will jump off.

Just the VPP partnership, can you update us on that? How does that -- in terms of referrals and the performance there?.

The partnership is going very well. Last year, we changed the strategy. We placed more focus and I think I mentioned that on my last call. But it’s good to reinforce the concept. We changed the focus from selling to [WPP] [ph] company into selling 2,000 weekly customers. And that change and strategy work very productive to us as part of WPP family.

I think that we gained much more momentum selling to big corporations, big customers that we have rather than customers that we used to do in the past to the WPP companies. So WPP relationship is very healthy. We are very good partners.

I think that the synergies that WPP saw in that when they invested on us, they remain -- that investment remained being a real investment. So these are doing pretty well. And they are performing very well too, so they are very happy. So it’s a good partnership, a very good partnership..

That’s great. Thanks. Nice shot..

Our next question comes from Ashwin Shirvaikar from Citi. Please go ahead with your question..

Thank you. Good afternoon, Martín. Good afternoon, Alejandro. Congratulations on the results and good guidance also.

I guess my first question is with regards to -- as you look at your larger clients and you grow your larger clients, are you benefiting from sort of a cross-sell within the client? So a division of a company recommends you to enter the part of the company, things like that.

And I am just trying to figure out from your sales force composition of hunters versus farmers?.

Hi, Ashwin. Thank you for remarkable question. How are you? So I think that a few minutes ago, there is a very concrete number that we posted on our speech a few minutes ago. Certainly talking about your questions. And in essence what we did was that the tickets, I mean we did more revenue in percentage less customers. This is clear.

So when I am trying to tell you is that it’s not just as we are seeking that we’re benefiting from the cross-selling, we are doing it and we are increasing the average ticket for each of our customers. So that’s farming. That’s a definition of farming for us. So those are car parks.

Now moving to the corner, I think that in pretty much all the accounts that we have where we have been able to jump the walls of one area to go to another area. And that is constantly happening and we did more. For the first time we are -- we have five accounts I think we retain, five accounts bigger in run rate than million.

We have some accounts forecasting two times start for next year. So this movement is extremely positive. And I think that’s the definition of what one needs to do which is people penetrating the accounts we have, the accounts we have can multiply the company several times if we do the things right and we are doing it.

So I think that we are moving into the right direction in that aspect..

That’s very good to hear. When I do my checks, I do find that revenue growth and finding demand is less of an issue not really a problem at all in the areas that you’re in. The question I wanted to ask because also about talent.

Are there any skill sets where it is difficult for you to find people? And it is this sort of demand kind of creating problems on wage inflation or higher attrition or anything like that. So if you could mention a few of those metrics..

That’s a good question. Providing metrics basically going that on the numbers, we are not providing those right now. However, let me give color on that.

As you know, we have many different initiatives to enter people into the company and train them and for the first time, we have a pretty large volume of people that we see came from that kind of university that we have. So that’s an extremely important thing.

On top of that, we also changed the way that we hire the people and we are leveraging much more those young guys that are being trained inside the company rather than just hiring them ready from the markets. So that’s the one side. The other thing is we tried is the talent -- sorry the skills that are long requested, well you may match in them.

The mobile technologies is like the cleaner followed by Java programmers, DotNet programmers and things like that. Those are profiles that are very approved in Latin America and we have not had any problems hiring them in regions. Even more it’s done and go to a new place and we open up the office in Peru.

We are expanding big time our operations in Mexico. We are planning to go to other countries in Latin America.

There is a lot of challenge in Latin America and we are being able to leverage that challenge in a very efficient way, not having progress in terms of salaries, not having progress in terms of quantity of the people neither quality of the people. So all in all, I think thus far, it’s very healthy..

That’s great. And couple of quick number questions if I may. I might have missed this.

Was any tax rate guidance for the 2015?.

No, there was no tax rate guidance, Ashwin. What important to know is that again the new software law in Argentina was enrolled. We are already involved into the new software launch, so the blended rate is going to be in the historical ranges for 2015..

Okay. Got it. Okay. That’s actually all my questions. Thank you very much..

Thank you, Ashwin..

Our next question comes from Ryan Davis from Credit Suisse. Please go ahead with your question..

Hey, Martín and Alejandro congratulations on the quarter. Just one quick question around the model and the guidance specifically. Your guidance essentially caused for a flat line and net income or profit margin next year roughly 13% year-on-year, same thing about this year.

Is this lack of leverage in the model as a result of gains on transaction response representing the smaller portion of the earnings? Or can you kind of help me understand why it’s not equal?.

EPS, it’s going to be in line. EPS growth, you normalize the number of shares it reminds that we have a significant amount of shares that were issued at the IPO. So if you normalize the amount of shares, you are going to see that EPS is going to be growing at the same level as the topline. That’s the guidance. Yeah, go ahead..

So last year the expanded 400 basis points that net income margin, right.

And it’s not going to expand from '15, '14, I am trying to understand is that because there is less gains on transaction bonds or into the model a higher margin maybe?.

It’s a conservative guidance.

Definitely the gains on transaction with bonds as a percentage of revenue is declining over time, but again the leverage that we expect to provide in the future with our model -- with our business model is definitely great on the recent revenue purchase because of the volume proposition of our two wheelers and the value added that we provide with emerging technologies and G&A dilution.

Those are the two big levers that we have in terms of expanding market, but you are right, I mean the gain on transaction we bought as a percentage of revenue declining over time..

Okay. Thanks so much, guys. Congrats..

Thank you..

Our next question comes from Anil Doradla from William Blair. Please go ahead with your question..

Hey, guys. This is Matt Farrell on for Anil. First of all, congratulations on the strong year. My first question revolves around the visibility that you guys have to the 2015 revenue guidance? And then along with that, the kind of the trajectory of the top customer in 2015, that’s built into that guidance? Thank you..

Okay. Hello. And thank you for the questions. In terms of visibility as we usually get into the beginning of the year and while we do the annual budget process, we have a very good visibility for the quarter, especially for the first quarter of the year.

We usually have between an 80% and 90% visibility of the topline, including the backlog and also the renewals.

In the case of the year, I would say, visibility is pretty good and the tailwind that we have there is we have been working a couple of years now, I would say probably more than two years in terms of enlarging the relationship with our customers not, only in terms of size but also in terms of contract win.

So we have started seen the benefits of that and the outcome of that. We have longer-term relationships with our customers, the fact that we keep the same customers among the top 10 and the top 20 with few exceptions and also the fact that we’re increasing the size of their revenue.

The average revenue per account is showing that we’re gaining traction with those customers. And that’s definitely helping us in terms of visibility..

And then kind of another question I have is, what type of demand are you guys seeing in Europe? I know it’s been trending downward here as a percentage of revenue. And I was just curious what you guys are seeing? Thanks..

Well, Europe for us has always been -- indeed the first customer that we had in our history was in Europe. So we have an operation in the U.K., all right. And it’s growing slightly lower than the rest of the company. The fact is that pretty much all our top accounts are in the U.S.

and we have just a few accounts that are important for us that are in the U.K. But we are seeing now a pretty strong pipeline coming from the U.S. and the quality which is more important, the quality of the accounts that we have in the U.K. and that we have been able to grasp during last year is extremely good.

So with that, we are pretty confident that we will be able to increase our presence in Europe -- sorry not our presence, our business in Europe. And also we are seeing that Latin America is catching up.

So we see Europe and Latin America which are the two collateral markets that we have, like growing faster this year and continued into our growth nicely during 2015..

[Operator Instructions] Our next question comes from Avishai Kantor from Cowen and Company. Please go ahead with your question..

Yes. Hi. It’s Avishai for Moshe Katri a few quick question.

Can you talk a little bit about the drivers, the margins as far as -- in the quarter as far as the facts and wage inflation and pricing and also can you talk about your long-term margin target?.

Yeah. I mean, we’re not guiding for margins, but let me talk a little bit on what’s going on with the margins. As I explained before that Q4 has certain effects pretty much related to the working days that we have in Q4 that were less than in Q3 combined with seasonal rate increases, combined with certain FX headwinds.

But we usually hedge at both on line using this gain on transaction with bonds. Getting into 2015, we’ll continue investing in our studios so that will be a decision that we have taken strategically over time and we’ll continue investing in the studios.

In terms of some of the effects on the margin, I think the revenue per head is going to be essential for a very good upside trend in terms of that type of value that we’re delivering. In terms of some of the FX behavior across the region as we know many of the currencies in Latin America are weakening against the U.S. dollars.

So that’s going to be benefiting us in certain countries like Columbia, Uruguay, Mexico, Brazil, especially those countries have been devalued the currencies significantly over the last two months. In the case of our Argentina, its different situation as the phase of devaluation is going slow.

The government is trying to hold up into the currency that we call inflation but any potential negative effect on that extend were offsetting that to the gain of bond operations that we use as the cash. So that’s what we see in terms of the margins.

Definitely Q1 is usually the lowest quarter in terms of topline and gross margins because of that seasonality patterns that I mentioned prior into the call..

Can you quantify the effect of wage inflation and currency in the quarter?.

I mean, we’re not providing the numbers of wage inflation as such as we have been doing in the past. We have a strong track record of managing wage inflation. Definitely Argentina in the past has been high in terms of wage inflation, at the same time the devaluation had been pretty much offset in the wage inflation in the country.

Going forward, definitely what we see is a positive trend on many of the currencies. In Latin America, again, the particular case for Argentina is slightly different but that’s how we have been responded in the past. We have a good track record of keeping up with the margins within historical trends.

Well, at the same time in the company, we’ll speak to that..

And the next question, attrition was down 200 basis points year-over-year.

How is it in Buenos Aires, compared to the other region?.

Buenos Aires is higher. I would say it’s one of the outliers as part of the strategy of slowing attrition is going into tier-two city. And definitely the process that we’re putting in place is working. We have been able to decrease attrition but definitely Buenos Aires is one of the places where we face most competition for quality resources.

The good thing about our debt consolidation of strategies, we have been able to decentralize even Buenos Aires, not only Argentina. Argentina was 76% of our capital, by the end of last year, it is 68%. By the end of this year, it’s about 10 percentage points slowing down.

Those points of headcount are going into some of our brand new locations like Mexico, Medellin in Colombia and Peru. So that’s showing that our debt consolidation is working in favor of us and we’ll continue into that part. I mean, we are becoming the global company in Latin America and we’ll continue into that direction..

Okay.

And my last question, can you talk a little bit about free cash flow trends going into 2015?.

We’re not guiding to free cash flow. I can talk about the free cash flow in 2014. The operating cash flow was $11.6 million. We also have the CapEx of almost $15 million that included $3 million of real estate purchases.

And our free cash flow for the full year of 2014 was $9.3 million, including of course the foreign operations that free cash flow conversion of 37%, defining free cash flow conversion as free cash flow to net income..

Thank you very much..

No problem..

[Operator Instructions] And at this time, it’s showing no additional questions. I’d like to turn the conference call back over to management for any closing remarks..

So, thank you very much everybody for participating on the call. I’m looking forward to talk again in next quarter. Thank you..

Ladies and Gentlemen, that does conclude today’s conference call. We do thank you for attending. You may now disconnect your telephone lines..